Even though we're a product of the product, I don't see an auditor viewing oils for personal use as a business deduction; regardless of the 100 PV rule. If you give out samples from your personal stock, or use your personal oils for classes, your best bet is to estimate the usage and cost by drop and document it along with the date/event. Then deduct that amount.
Home office space is one of those tricky areas where you need to prove it was used solely and regularly for your business. You will also need to provide mortgage info to calculate the deduction. I have heard from others that this is a red flag deduction.
Whatever advertising costs incurred can be deducted. Your orders from Vistaprint are a legitimate deduction if they were for your business, as are photocopies, samples, etc. If you went to convention or paid to attend doTERRA classes, they too can be a deduction - but if you paid for an AromaTouch class and then used the AromaTouch oils for personal use, you'll have to figure out the difference. Just remember that if the IRS finds a problem with our taxes, they have the option of reviewing prior years too (up to 7 years?). It isn't worth it. Taxes, penalties, and interest will be assessed from the time the mistake was filed.
This isn't tax advice from a professional, this is what I've found researching my own taxes. If you have doubts, get a free consultation with tax professionals, or if your income is below $51,000; the IRS offers free tax preparation assistance through VITA.
Good luck!
On Thursday, February 14, 2013 5:23:20 PM UTC-7, Rene' Dierking wrote:
Linda,--
I was SO glad to see you responded to my question to Pat. I was told when I got involved with Arbonne awhile ago that if I was using something at home and used it as a sample for people to use that it could be written off. I'm not trying to be dishonest about my oil use, but legitimately our oils for samples that we may use are to further our businesses, are they not? I have really been looking at both of the publications you listed, 334 and 535, as we are filing our taxes on TurboTax. What I guess I'm most curious about is deciding to take a loss on a business. I just started this past July and am taking a loss as I don't have but 1 person selling under me. I got some business cards and magnets made for my car with Vistaprint. In my mind, I can write off that stuff along with my home office space from what I've read. How many years can you take a loss with a business, though? I don't want to have any red flags to the IRS. This info will probably help many other people here too, so I'm interested in your thoughts. Thanks!
-Rene' :)
On Tuesday, February 12, 2013 6:40:41 AM UTC-7, Linda Mustric wrote:I do not believe you can write off your personal oils! Samples, yes of course, but what you use for yourself does not advance your business. Yes I know, it gives you the testimonials you need to convince others to purchase, but if we look at other industries and what the IRS allows you will see what I mean. Nurses can deduct their scrubs. Bus drivers can deduct their uniforms. Bankers cannot deduct their suits and ties because suits and ties can be worn on the street. A landscaper can deduct the landscaping around his/her home because it is advertising. As a fashion consultant I would love to deduct all my shoes but I don't (I sell women's clothes http://www.myjockeyp2p.com/lindamustric ). I see how you could argue that all of your personal oils are advertising your glowing health, but I would not want to mess with the IRS! Generally the IRS says you can deduct those expenses that are "ordinary and necessary" for your business. It is not really necessary for you to have a supply of oils in your kitchen in order for you to run your business. Here's a link http://www.irs.gov/Businesses/Small-Businesses-&-Self- to get you started. Also, order a copy of Pub. 535(Biz Exp) and Pub 334 (Tax Guide 4 Small Biz). Next, call your local H&R Block and make an appointment! We love doing Schedule C's and are trained to ask the right questions to find all of your legal deductions! (see our twitter campaign #IamHRBlock)Employed/Deducting-Business- Expenses
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